Misconduct claims soar with layoffs

Businesses looking to contain unemployment costs might have found an easy way to challenge a laid-off worker's rights to jobless benefits, some experts say: Accuse the employee of wrongdoing.

During the recession, allegations of misconduct among the unemployed have jumped 46 percent even as Florida's labor force shrank by 6.3 percent.

In 2006-07, there were 306,194 unemployment claims that included an accusation of misconduct, according to data from the National Employment Law Project. In 2008-09 – the heart of the recession – there were 446,866.

Some experts say that indicates employers may be camouflaging layoffs to save money. Workers fired for misconduct don't get benefits and don'tcount against businesses when it comes time to calculate their contribution to the state's unemployment trust fund.

"That's their incentive," said Bruce Nissen, director of research at Florida International University's Center for Labor Research and Studies. "This is a way to reduce their costs."

"I can't peer into the motives of any firm," said Wenger, an unemployment expert, "but if you're applying the standards of what constitutes misconduct consistently, I don't see why it would go up."

But other researchers have argued that the spike in misconduct allegations in 2008 and 2009 reflects the surge in unemployment claims. And representatives of Florida's business lobbies said they don't think employers are masking layoffs as misconduct firings.

"I think that's a stretch," said Tamela Perdue, general counsel for Associated Industries of Florida. "I'd be very surprised if that's happening."

When a worker files for unemployment, the employer is asked why the person was let go. If they claim "misconduct," the state can deny jobless benefits.

But misconduct doesn't mean poor performance. That can get a worker fired, but under Florida law, only serious offenses such as dishonesty, insubordination, falsifying records or willfully disregarding an employer's rules make workers ineligible for benefits.

Karen Phillips, general counsel for the Florida United Businesses Association, said small companies may not recognize the distinction. They may equate all firing offenses with "misconduct" and make that charge when the laid-off worker seeks benefits.

"It's a very high standard," Phillips said. "The layperson might not understand that."

Lawyers from around the state, however, say they are seeing more flimsy misconduct charges than ever before. Jacksonville legal-aid attorney Megan Wall said her office gets five to 10 cases a week, compared with one or two a month before the recession.

"I find myself thinking, ‘What, everybody in town is committing misconduct?'" said Wall.

Wall recently represented Tom Gillis, a St. Augustine construction superintendent who was let go from a company that built and remodeled restaurants. Gillis was denied unemployment when his bosses accused him of misconduct. The offense? After finishing a job, he left the site while a crew was cleaning up.

"I was totally aghast," said Gillis, 56. "I'd been with them 16 years, bringing jobs in on time."

Wall, who won Gillis' case on appeal, called the misconduct allegation "totally trumped up." She and Gillis said the real reason he was let go was because the company had little work in the pipeline.

In Orlando, legal-aid attorney Sally McArthur worked with four people fired from a time-share company last year. The employees came from the same department which, at the time, was being trimmed.

When they sought unemployment, the employer cited misconduct, saying the workers had used company e-mail for personal use. McArthur said that was true – the employees admitted as much – but scoffed at the notion that the behavior got them fired.

"It's obvious these were layoffs masquerading as misconduct cases," she said. "Everyone there was sending personal e-mail – managers admitted they did. But the rule was never enforced."

Companies have good reason to limit the number of people collecting benefits. Businesses pay unemployment taxes – which finance Florida's unemployment trust fund – based, in part, on how much their ex-employees collect over time. Generally, when fewer workers receive unemployment, the company pays less in taxes.

There is little downside to alleging misconduct. Though employers can be charged with a third-degree felony for lying to deny benefits, the state agency that administers unemployment said it can find no record of that happening.

The Florida Agency for Workforce Innovation also said it has found no evidence that employers are fabricating misconduct claims. And the rate at which employees are denied benefits because of misconduct, the agency reports, has hovered around 29 percent for several years.